CBN sells $1bn to clear backlog of forex demand

The Central Bank of Nigeria, CBN, has sold foreign exchange (forex) worth $1 billion US dollar on the forward market to clear a backlog of dollar obligations in selected sectors.

Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele The transaction, according to traders, was the largest special auction since the peg on the naira was removed in June.

This comes as the Financial Reporting Council of Nigeria, FRC, has lifted the suspension placed on the chairman of Stanbic IBTC Holdings Plc, Mr. Atedo Peterside, and three other directors of the bank following amicable resolution of the dispute over the bank’s audited financial statements for 2015.

The development has, therefore, enabled them to sign where applicable, the audited financial statement, leading to issue of the 2015 financial statement and accounts.

In a statement to the Nigerian Stock Exchange (NSE) dated December 21, 2016 and signed by the Company Secretary, Chidi Okezie, Stanbic IBTC said following the resolution of the issue, FRC has authorized its external auditors, Messrs. KPMG Professional Services to sign the 2015 audited financial statements.

The CBN, had told banks to prioritize airlines, manufacturing firms, petroleum products importers and agriculture sectors, the sectors worst hit by the dollar shortage, in the auction.

“The CBN sold $1 billion at last week’s special forex auction and directed banks to issue fresh letters of credit to reflect the amount sold in favour of the affected sectors,” Reuters quoted a senior currency trader as saying. Traders said the central bank sold 30-day and 60-day forwards at the auction.

The CBN had, December 19, instructed banks to submit their backlog of dollar demand from fuel importers, airlines, raw materials and machinery for manufacturing firms and agricultural chemicals for the special forex intervention. Meanwhile, transactions on the Nigerian Stock Exchange, NSE, remained upbeat yesterday with investors gaining another N32 billion at the close of the day’s session.